Licenses for business in the UAE

One of the mandatory requirements for starting business in the United Arab Emirates is obtainment of license depending on the type of business. Licenses are issued by both government authority of the country and each emirate separately (each Emirate has its own requirements that shall be met in order to obtain licenses). Depending on the type of company, registration is performed in free trade zones or by local chamber of commerce or by economic departments or the ministry of economy of the Country.

Particular types of companies, apart from license, are also required to receive approvals for incorporation from relevant Ministry. For instance, manufacturing companies - from the Ministry of Industry, banks and other financial institutions - from the Central Bank of the UAE, medical and pharmaceutical firms – from the Ministry of Healthcare.

Licenses are regularly issued within four to five business days. License fee depends on several factors: the annual office lease charges, the scope of services and type of the company. Normally, standard license fee is around 10-15 thousand dirhams. Special licenses may be much more expensive and can take longer time to obtain.

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Types of licenses in the UAE

Commercial

Commercial license is required for incorporation of trading company in the UAE. It is issued to companies, registered on the mainland of the Emirates, and to firms incorporated in FTZ. Legal status of such companies in the Free Trade Zones - FZC - companies with two or more shareholder, FZE - with one shareholder.

Professional

Industrial

This license is issued for businesses engaged in manufacturing or industrial activities. It may be issued to companies on the mainland, and companies registered in FTZ and having legal status of FZE and FZC.

If local production of the company constitutes 40% of the added value or more and at least 51% of the company is owned by local citizen, then such company is issued national Industrial license. The products exported by such companies to the Gulf countries are exempt from customs duties. Furthermore, such companies, having the license in free trade zone, may also conduct their business outside the UAE.

Validity of all types of licenses is 1 year. Upon expiration of such period, they should be renewed accordingly. In case of failure to comply with terms for renewal of license administrative penalties are imposed in the UAE which may include closing corporate bank account and termination of business.

Thus the proper company registration and timely renewal are crucial for company successful functioning.